INDIAN BUSINESS

ENVIRONMENT
Chap 4: State Policies
DIRECTIVE PRINCIPLES OF STATE POLICY (DPSP)
 These are included in Part IV of the Constitution.
 According to Article 37, they are not enforceable by the courts.
 The phrase ‘Directive Principles of State Policy’ means the principles
which the states should keep in mind while framing the laws and
formulating policy.
 Articles 39 to 51 contain the various directive principles. These
principles are amalgamation of Socialistic, Gandhian and Liberal
principles.
 There are ideas which are to inspire the state to work for the
common good of the people and establish social and economic
democracy in the country.
 Emphasis is on the Welfare of State Model.
 The establishment of Directive Principles of State Policy is in
accordance with certain articles of the Constitution of India.
DIRECTIVE PRINCIPLES OF STATE POLICY (DPSP)
 The economic importance of Directive Principles of State Policy is:
 (i) To provide adequate means of livelihood for all the citizens.
 (ii) To secure equal pay for work to both men and women.
 (iii) To protect the workers, especially children.
 (iv) To regulate the economic system of the country that it does not lead to
concentration of wealth and means of production.
 (v) To make provision for securing right to work, to education and to public
assistance in cases of unemployment, old age, sickness and similar other cases.
 (vi) To ensure a decent standard of living and facilities of leisure for all workers.
 The main objective is to enable the individual to lead a good and satisfying life.
 All the provisions of directive principles of state policy guide the government
policies towards the business and other economic and social activities.
 The government has also enacted a number of acts & laws, policies & rules
keeping in view the directive principles, which are directly related with the
business operations. Various Acts like FERA, Factories Act. MRTP Act, Minimum
Wages Act, Industrial (Development and Regulation) Act, Industrial policy, etc.,
are based on the Directive Principles of the Constitution.
 The government, through these acts & regulations, protects the interests of
working men, women and children, prevents concentration of economic power,
and promotes and protects the interest of small and cottage industries.
MAJOR PROVISIONS OF INDIAN CONSTITUTION APPLICABLE
TO BUSINESS
 Economic Importance:
 The preamble of the Indian Constitution guarantees to its every
citizen:
 Economic Justice: The Indian Constitution laid down social,
economic and political justice to every citizen in the country. It is,
therefore, the duly of the business organizations to provide social,
economic and political justice to every citizen.
 Liberty of Thought, Expression, Belief, Faith and Worship: This has
been accepted in our constitution that every citizen has liberty of
thought, expression, belief, faith and worship. According to this
concept every business, organization should have liberty of thought,
expression etc., with everyone.
 Equality of Status and of Opportunity: According to this concept
every businessman should believe and give equal opportunity to
others. This can be achieved through eradication of poverty. This
does not mean winning gap between the poor and rich.
FUNDAMENTAL RIGHTS & BUSINESS

 The Indian Constitution incorporates a list of Fundamental Rights and

guarantees their inviolability by executive and legislative authorities.
 Part III (Articles 12-35) deals with the Fundamental Rights granted to
individuals.
 These rights were finalized by the committee of the Constituent
Assembly headed by Sardar Vallabhbhai Patel.
 The fundamental rights are superior to ordinary laws; they can be
altered only through constitutional amendments.
 Originally, the fundamental Rights were seven but in 1978, through
the 44th amendment of the constitution, the right to property was
removed from the list of fundamental rights.
 The six types of fundamental rights of the constitution & its
implications to Business are as follows:
FUNDAMENTAL RIGHTS & BUSINESS
 Right to Equality (Articles 14 to 18):
 The Constitution clearly provides that the state shall not deny to any
person equality before law or the equal protection of law within the
territory of India.
 It cannot discriminate against any citizen on grounds of religion, race,
caste, sex, and place of birth or any of them.
 It means that every citizen has access to shops, public restaurants,
hotels, places of public entertainment etc., and is free to use wells,
tanks, roads and places of public resort maintained at state funds.
 In the employment aspects, the appointment to offices under the state
also equal opportunity shall be provided to all the citizens, and no
person shall be denied employment on grounds of religion, race, caste,
sex, descent, and place of birth, residence or any of them.
 Again, to make the right to equality a reality; untouchability has been
abolished and its practice in any form has been made an offence
punishable in accordance with law.
 According to this article, the business should provide equality before
law, social equality and economic equality.
FUNDAMENTAL RIGHTS & BUSINESS
 Right to Freedom (Articles 19 to 22):
 The six Freedoms are as follows:
 (i) Freedom of speech and expression.
 (ii) Freedom of peaceful assembly without arms.
 (iii) Freedom of association.
 (iv) Freedom of movement throughout the territory of India.
 (v) Freedom to reside or settle any part of the territory.
 (vi) Freedom to practice any profession, or to carry on any occupation,
trade or business.
 The right to freedom is also applied equally in business.
 Businessmen can express their problems freely to the government and
can get a solution to it.
 Similarly, every citizen has the right to choose any business or profession
and can form unions, and conduct meetings.
FUNDAMENTAL RIGHTS & BUSINESS
 Right against Exploitation (Articles 23 to 24):
 This deals with the right against exploitation and seeks to prevent
exploitation of weaker sections of society by unscrupulous persons as
well as the state.
 Article 23 prohibits traffic in human beings, involuntary work without
payment and other forms of forced labor.
 Article 24 prohibits the employment of children below 14 years of age in
factories and hazardous occupations, employing women employees in
night shifts in factories etc.
 The economic importance of right against exploitation is:
 (i) The government takes necessary steps to remove bonded labor.
 (ii) The Factories Act help to prevent exploitation of women and children
employees.
 (iii) The owner of the factories are guided to make provision for safety
and welfare of the workers and they compulsorily appoint a labor
welfare officer, in factories where 500 or more workers are employed.
FUNDAMENTAL RIGHTS & BUSINESS
 Right to Freedom of Religion (Articles 25 to 28):
 Subject to public order, morality, health etc., the citizens enjoy freedom
of conscience and are free to profess, practice and propagate any
religion.
 However, the state can regulate or restrict the economic, financial,
political or other secular activities associated with religious practices.
 No citizen can be compelled to pay any taxes the proceeds of which
are to be spent for the promotion or maintenance of any particular
religion or religious domination.
 The Economic importance of the right to freedom of religion is:
 (i) The government cannot spend tax money for the development of any
religion.
 (ii) Nobody can be compelled to pay tax for the welfare of any specific
religion.
 (iii) No one shall be forced to transfer property or any agreement of a
business nature in the name of a particular religion.
FUNDAMENTAL RIGHTS & BUSINESS
 Cultural and Educational Rights (Articles 29 to 30):
 This stipulates that the State shall not impose upon it any culture other
than the community’s own culture.
 A minority community has the right to preserve its culture and religious
interests.
 Article 30 confers upon a minority community the right to establish and
administer educational institutions of its choice.
 A notable feature of the educational and cultural right is that unlike
other fundamental rights, it is not subject to any restriction, except that
the State can make special provisions for the advancement of any
socially and educationally backward classes of citizens.
 The economic importance of cultural and educational rights are:
 (i) The state does not discriminate to give economic assistance to the
minority institutions.
 (ii) The aided institution cannot refuse admission to any of the citizens on
the ground that he belongs to a particular caste, religion, language or
region.
FUNDAMENTAL RIGHTS & BUSINESS
 Right to Constitutional Remedies (Article 32):
 This right has been described by Dr. Ambedkar as the ‘heart and soul of
the Constitution.
 In fact, the mere declaration of fundamental rights is useless unless
effective remedies are available for their enforcement.
 This has been ensured under Article 32 which grants the right to move to
the Supreme Court by appropriate proceedings for the enforcement of
the rights conferred by the Constitution.
 Clause (2) of Article 32 confers power on the supreme court to issue
appropriate directions or orders to writs, including writs in the name of
habeas corpus, mandamus, prohibition, quo-warrant and certiorari for
the enforcement of any of the rights conferred by Part III of the
constitution.
 Thus, the fundamental rights enumerated in the constitution guarantee a
number of economic and social lights to the citizens.
 At the same time the state has the power to impose reasonable
restrictions on such rights in the interest of the people.